Dolby Facing 'Acute Challenge' in TVs, Game Consoles, Says CFO

The macroeconomic environment is an “acute challenge" for TVs and game consoles, said Dolby Chief Financial Officer Robert Park at an investor conference Wednesday. Broadcast, comprising TVs and set-top boxes, is down high-single digits following a “huge take-up” in TV sales in FY 2021, Park said. Broadcast generates about 39% of Dolby revenue, he said. The drag on TV sales could be economy-related or "the tail end of a pull-through from COVID where people were loading up their living rooms," he said. Park cited Sony, noting a “serious shortage” of the PlayStation 5. “And with that, headsets don’t go and other things don’t go,” he said, referencing a trickle-down effect on accessory sales that embed Dolby technologies. Dolby is also feeling the brunt of lower auto sales in its core technologies business, but it's benefitting from manufacturers’ focus on premium technology amid declining sales, Park said. “The higher end SKUs … are faring better than the lower end,” said the executive: “If you only have 100 chips to ship, you’re going to ship the ones that have the highest margin.” Dolby hasn’t seen any deferment of OEM partnerships or adoption of higher end Dolby technologies as a result of slowing macroeconomic trends, Park said, but they could affect licensees' ability to ship product. “We get paid when it ships,” he said, and there are shipping delays even at the premier end. Commenting on Dolby Live, a Dolby Atmos-equipped venue at the Park MGM in Las Vegas, Park said the initial event featuring Aerosmith, scheduled to start this month, was delayed due to an issue with the band. The event, billed as the first live concert experience presented in Dolby Atmos, is now slated to premiere Sept. 14.